WTI fell for a second session and traded near $65.90 per barrel during European hours on Wednesday. The move followed US stock data that raised concerns about excess supply, ahead of an Energy Information Administration report due later in the day.<\/p>\n
The American Petroleum Institute reported US crude stocks rose by 11.4 million barrels in the week ended 20 February. This reversed the prior week\u2019s 0.609 million-barrel draw.<\/p>\n
Attention is also on supply risks before a third round of US\u2013Iran nuclear talks. In his State of the Union address, President Donald Trump said he preferred diplomacy and accused Iran of rebuilding its nuclear programme and developing missiles able to strike the US.<\/p>\n
Iran\u2019s deputy foreign minister said Tehran would do \u201cwhatever it takes\u201d to reach a deal with Washington. The Strait of Hormuz is being monitored, as it handles about 20% of global oil flows and any escalation could disrupt supply.<\/p>\n
Traders are weighing oil demand risks from new US trade measures. Trump\u2019s 10% global tariff took effect on Tuesday, with steps under way to raise it to 15%.<\/p>\n
Looking back a year ago, we saw a massive 11.4 million-barrel build in US crude inventories crush prices below $66. That memory of oversupply is now running up against a much different market. This suggests that simply betting on a continued price drop could be a mistake.<\/p>\n
The demand-side concerns from President Trump’s tariffs in 2025 have evolved into worries about a broader economic slowdown. The International Energy Agency recently trimmed its 2026 demand growth forecast by 100,000 barrels per day, citing weakness in key Asian markets. The latest EIA report for the week ending February 20, 2026, also showed a modest crude build of 2.8 million barrels, reinforcing the theme of softer consumption.<\/p>\n
On the supply side, however, the situation is much tighter than it was a year ago. We have OPEC+ holding firm on production cuts through the second quarter, and the US-Iran nuclear talks remain completely stalled, keeping a geopolitical risk premium in the market. Any escalation in the Strait of Hormuz could easily erase the current supply surplus.<\/p>\n
These conflicting signals of weak demand versus tight supply point toward significant volatility in the coming weeks. This environment is less suited for clean directional bets and more for strategies that profit from sharp price swings. Options traders should consider buying straddles or strangles to capitalize on this uncertainty.<\/p>\n
The CBOE Crude Oil Volatility Index (OVX) is currently hovering around 38, which is elevated but below the extremes seen in early 2022 when it spiked over 70. This suggests that options premiums are not yet pricing in a major supply shock, presenting a potential opportunity. We see this as a chance to purchase volatility before a potential geopolitical event forces the market’s hand.<\/p>\n
Given this, acquiring out-of-the-money call options on WTI futures expiring in April or May seems prudent to guard against a sudden supply-driven rally. Simultaneously, holding some puts could protect portfolios if recessionary fears overwhelm the supply constraints and push prices back toward the low $70s. This balanced approach prepares us for a market that is clearly being pulled in two directions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI slipped near $65.90 as US crude inventories surged, while Iran talks and tariffs fueled uncertainty.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43595","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/43595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=43595"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/43595\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=43595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=43595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=43595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}